Are Kidokinetics guarantors personally liable for the franchisee's obligations under the agreement?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
ftware and Customized Software will be referred to collectively in this Agreement as the "Proprietary Software."
- E. Guarantors agree to personally, and jointly and severally, guaranty Franchisee's obligations and covenants under this Agreement and to be bound by each provision as though each were the Franchisee.
- F. Now, the parties desire to define the terms and conditions on which Franchisor will grant use of the KIDOLINK Software and Customized Software to Franchisee in accordance with the provisions of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises contained in this Agreement and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
1.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, guarantors are indeed personally liable for the franchisee's obligations under the agreement. Specifically, if the franchisee is entering into a software agreement with Kidokinetics, the guarantors agree to personally, and jointly and severally, guarantee the franchisee's obligations and covenants under that agreement. This means that each guarantor is individually responsible for the full amount of the franchisee's debt or obligations.
Furthermore, if the franchisee is an entity, each principal and their spouse must personally execute and bind themselves to a Guaranty. This Guaranty ensures that they jointly and severally guarantee the franchisee's performance of all obligations, covenants, and agreements under the Franchise Agreement. This arrangement is designed to provide Kidokinetics with additional security, ensuring that there are individuals who are personally committed to the franchisee's compliance with the terms of the agreement.
This requirement is a fairly standard practice in franchising, as it mitigates the risk for the franchisor. By having personal guarantees, Kidokinetics can pursue the personal assets of the guarantors if the franchisee fails to meet its financial or contractual obligations. Prospective franchisees should carefully consider the implications of providing a personal guarantee, as it can have significant financial consequences.